Cases

Slovenian letterbox companies and workers exploitation

The Slovenian Gov is clearly not doing its job to stop “entrepreneurs” with a criminal background in the posting industry.

Some years ago when the Solvenian construction bubble bursted and each month additional thousands of construction workers lost their jobs these guys started to hire jobless Slovenian construction workers and to post them immediately to Germany and other MS in the framework of providing services in the form of subcontracts of the “entrepreneurs” with construction companies in the other MS.

The business model was to pay some parts of the outstanding wages to the workers during the first months to keep them working and then to stop the wage payments for the last weeks or months promising at the same time that the workers would get the wage arrears as soon as the contractor would pay the subcontractors (subbie). This promise again just to keep them working until the subcontract was finished.

The services of these subbies were in most cases offered to the contractors at dumping prices not allowing for the payment minimum wage at the host country plus accommodation, transport and allowances costs plus social security back home and a profit. As many of the Slovenian construction workers were organised in the Slovenian trade union our sister union there and their confederation got aware of that very soon as returning workers reported back to them.

The slovenian trade union ZSSS managed to get a broad media coverage about this fraud scheme. So everybody in Slovenia looking for jobs here got aware of the fraud and the fraudsters were no longer successful in recruiting workers living in Slovenia.

All this happened without any visible reaction or action of Slovenian Gov. I at least heard nothing about any prosecution or arrests. Already at that time I got reactions from Slovenian journalists telling me that the Gov did nothing though the Slovenian media had presented names and proof in public.

As the Slovenian “entrepreneurs” ran more and more short of Slovenian workers after the media coverage they obviously changed their recruiting pattern to recruit cross-border instead, mainly in Bosnia-Hercegovina, and to post these freshly recruited victims immediately after their arrival in Slovenia to other MS. As you may know the jobless workers there are so desperate to get a job at all and the wages for the employed are so low that both of these groups can be easily lured into employment relationships abroad.

The Slovenian letterbox “entrepreneurs” hired them and posted them after just a minute or so on Slovenian territory (necessary to get the working permit and the A 1 for them). Though Slovenia is still suffering from extraordinary unemployment in the construction sector obviously it is no problem for the criminals to get work permits for their Bosnian victims necessary for posting to other MS. As you can see in the article below we are talking here about at least 100.000 workers with A 1 forms from the Slovenian Gov per year, those without any registration not counted. While there may be some true posting situations for some ten thousands workers posted by proper firms I assume that the majority of these 100.000 A 1 is based on fraudulous posting on the back of the workers. At the best time of the construction bubble Slovenia had a bit more than 100.000 construction workers working in Slovenia, and a significant proportion of those were posted to Slovenia itself from Croatia etc.

Again, nothing seems to be done by the Slovenian gov. to stop these fraudsters, in contrary some parts of the gov. seem to collaborate with them (why else are working permits issued to third-country-nationals in the situation of high domestic unemployment in the same sector). Maybe they think, as long as they don’t not work in Slovenia but posted immediately it is no problem for Slovenia).

I think it would be very useful to dig into this reality and at the same time deal with the problem of the fake companies, which are being used on a massive scale.In the interest of the affected workers but also to combat dumping practises in the Internal Market as the criminal entrepreneurs offer the work of their workers to a price no serious construction subbie could ever work for, even when he is coming from Romania, Bulgaria etc., not to speak of serious entrepreneurs from countries with higher wages like Poland, Czech Republic, Slovakia, Slovenia, Hungary, Austria, Belgium, Netherlands or Germany.

The ignorance or even complicity on the side of some Slovenian public institutions is more than short-sighted: as more and more examples involving fraudulous Slovenian companies come to Germany here where the general contractor had to pay the wages himself due to our general contractors liability, the chances for serious construction subbies from Slovenia in Germany are getting worse as one cannot tell them apart before entering into contractual relations. So I suspect that corruption could also play a part, but again: the Gov as a whole also seems to tolerate the system.